Roxas to ask KLM to reconsider Manila pullout

PRESIDENT Benigno Aquino III has ordered Transport Secretary Manuel Roxas to ask KLM to reconsider its plan to stop providing the country’s remaining direct flights to Europe as a result of high Philippine taxes and fees.

The Dutch airline had earlier said the government’s refusal to offer relief to international carriers had led it to cut its daily flights to Amsterdam from Manila to six times a week starting Nov. 1.

By April 2012, the airline will stop all direct flights to Manila from Amsterdan and fly through Hong Kong instead, said Cees Ursem, Air France-KLM’s country manager.

KLM, the last European airline with operations in Manila, had lobbied unsuccessfully to get the government to drop the 3-percent common carriers tax and the 2.5-percent gross billings tax on cargo and passenger revenues originating in the country.

Those two taxes aside, the Philippines will start charging carriers a 12-percent value-added tax on crew accommodations on Nov. 1.

Ursem said other European airlines, including British Airways, Lufthansa and Swissair, no longer were serving Manila for the same reason.

Deputy presidential spokeswoman Abigail Valte said the meeting between Roxas and KLM officials next week was aimed at solving the airline’s problems here.

“The President has tasked me to serve as the liaison between KLM and other government agencies involved, since this is a tax issue which is primarily within the turf of the Department of Finance and the Bureau of Internal Revenue,” Roxas said.

“We hope to find solutions to their concerns. I have to listen to their concerns. They say we are the only country that imposes these taxes.”

Ursem said once the airline stopped its Manila operations, “it will send a signal that doing business in the Philippines is very difficult and no European carrier will fly to the Philippines.”

A pending measure in Congress, House Bill 3928, filed by Batangas Rep. Hermilando Mandanas, seeks to exempt foreign airlines from the carriers tax.

The House ways and means committee has endorsed the bill, but the proposal has yet to be approved by the plenary.

Earlier, Steven Crowdey, first vice chairman of the Board of Airline Representatives, told the Manila Standard that the Philippines was the only country charging such taxes.

“By contrast, other Asian countries offer incentives to foreign carriers,” Crowdey said.

“There has been an exodus of foreign carriers, primarily long-haul, from the Philippines for a number of years. Unlike hotels, aircraft capacity can be moved easily to countries that provide better returns.”


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